The government estimates the system could save up to £2bn a year through faster journey times and faster ticket purchasing.

The system will rely on a range of new technologies. The Europay-Mastercard-Visa (EMV) standard is the new standard for chip-based bank payment cards. The standard covers contactless payment cards and a variety of chip and pin cards. It can be used to enable people to tap their bank cards against payment readers when they travel.

Contactless payment bank cards are currently being rolled out. Barclays Bank expects the majority of its customers to have received them by 2011.

The technology is being trialled on 200 buses in Liverpool, and Transport for London is working towards a direct payment scheme on the Oyster card.

The roll out of NFC technology in phones will take some time because. The government's consultation document says: "There is a cost of implementation for manufacturers and so there needs to be a business case for them to do so. NFC needs new standards and business models to develop, which takes time."

The Department for Transport created the Integrated Transport Smartcard Organisation (ITSO) to develop and manage a national specification for integrated smartcard technology. The vision for England is for all public transport to use the smartcard system, starting with interoperable city-wide schemes.

The back office system supporting each journey will also need to be rolled out nationally. The Host Operator Processing System (HOPS) collects and processes all journey data but only a limited number of HOPS exist in England at the moment. It is expensive and the government is suggesting groups of organisations share one system to spread costs.

Transport Minister Sadiq Khan said: "The technology and the interest is already out there. I want to see a universal coverage of smart ticketing on all modes of public transport in England as quickly as possible."

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